HOME Investment Partnership Program

Purpose

Housing New Mexico's HOME rental is designed to provide gap financing for a variety of affordable and special needs housing projects throughout the state of New Mexico. As gap financing, HOME funds are typically used in combination with other housing resources such as Housing New Mexico’s Low Income Housing Tax Credit (LIHTC) and 542(c) loan programs.

Various other federal requirements must be met in order to use HOME funding. These include, among others, completion of HUD's environmental review process and use of Davis Bacon wage rates in some cases.

Preference will be given to projects having a Housing New Mexico designated Community Housing Development Organization (CHDO) as developer, owner, or sponsor. To obtain an award under the CHDO limits below, the CHDO must agree to conform to HUD’s CHDO set-aside regulations, otherwise a CHDO would only qualify for a non-CHDO award.

To learn more about CHDOs go here.

Eligible Borrowers

Nonprofit entities, for-profit entities, public housing agencies and tribally designated housing entities.

Eligible Projects

Cost of construction, rehabilitation, acquisition and related soft costs as allowed under applicable regulations.

Secondary Financing

HOME mortgage may be in first or junior lien position on the property. In general, Housing New Mexico will obtain the highest lien position possible for a HOME loan.

Interest Rates

Generally, HOME loans are offered at 0% - 3% interest rate. Rates are determined based on staff underwriting of the project, among other considerations.

Loan Term & Amount

Community Housing Development Organization (CHDO) Projects:

Up to two-year construction loan term
Up to 40-year permanent loan term
Lesser of $1,250,000 per project regardless of type of LIHTC requested (or lack thereof) or 80% of project’s total development cost

9% LIHTC Projects:

Up to two-year construction loan term
Up to 40-year permanent loan term
Lesser of $500,000 per project or 80% of project’s total development cost

4% LIHTC Projects:

Up to two-year construction loan term
Up to 40-year permanent loan term
Lesser of $1,000,000 per project or 80% of project’s total development cost

Affordability Requirements

Rental: Households earning 60% or less of area median income (AMI) must occupy HOME-funded units. If a project has 5 or more HOME-funded units, 20% of the HOME-funded units must be restricted to households at or below 50% of AMI.

If HOME-funded units are restricted to households earning 30% or less of AMI, the loan may be forgivable.

Guaranties

Guaranty(ies) will be required from financially responsible entities or individuals acceptable to Housing New Mexico if other than minimal funds are to be used during construction. See checklist for required information.

Subordinations

HOME loans may be subordinated to first lien position loans but are still considered "hard debt" (not subject to available cash flow for repayment.) For certain HUD guaranteed loans such as 221(d)4, HUD requires that subordinate lenders sign its cash flow-only subordination agreement (form HUD-92420M). Housing New Mexico will consider signing it on a case-by-case basis at its sole discretion only if certain criteria are met.

Application Due Dates

Complete applications must be received no later than 60 days prior to a regularly scheduled meeting of the Housing New Mexico Board of Directors in order to be considered at that meeting. Meetings of the Housing New Mexico Board of Directors are generally held every third Wednesday of the month. With the exception of applications submitted for consideration with applications for 9% Low Income Housing Tax Credits (LIHTC), all applications submitted by the deadline for a particular meeting of the Housing New Mexico Board of Directors will be treated as one funding round and evaluated concurrently.

HOME and 9 Percent Low Income Housing Tax Credits (LIHTC)

If an applicant plans to request HOME funds when applying for LIHTC in the 9% annual competitive round, they must do so as part of their LIHTC application (see LIHTC application package for details). If a project receives a preliminary LIHTC award notification, the applicant must submit the required loan fee(s) within five business days of receipt of said notification.

HOME applications submitted with LIHTC applications will follow the approval process found in the then-current State of New Mexico Housing Tax Credit Qualified Allocation Plan (QAP) and will generally be heard at the Housing New Mexico Board of Directors meeting with the accompanying 9% LIHTC application.

HOME and 4 Percent Low Income Housing Tax Credits (LIHTC)

If an applicant plans to request HOME funds when applying for a 4% LIHTC allocation, they must do so as part of their LIHTC application (see LIHTC application package for details). The applicant must submit the required loan fee(s) at the same time they submit their 4% LIHTC application.